April 2006 SBH Quarterly Newsletter
PDF FormatOregon Employment Case Law
The cost of wage disputes.
Recent cases in both Oregon and Washington regarding disputes over wages
bring reminders of the costs of failing to properly administer payrolls.
Often wage disputes arise at termination of an employee.
For example, in Dice v. City of Montesano, 128 P3d 1253 Wash. App
Div 2 (2006), the employer failed to pay a terminated employee three
months of severance pay as outlined by an at-will employment agreement. The
city disputed the interpretation of the contract language, but lost. The
court found the city had drafted the agreement with the employee and the
agreement was unambiguous as to the severance pay. The failure to pay the
severance was held to be willful under RCW 49.52.050; 49.52.070 and, thus, subject to
double damages and attorney fees.
Employers planning to terminate or lay off an employee would be well-advised
to first review time records, especially for employees considered nonexempt
and, thus, subject to overtime pay under state or federal wage laws. Failure
to pay overtime is a violation. In Oregon, failure to pay all wages due
within a specified period after last day of employment is a separate
violation.
Avoiding an injured worker’s discrimination claim.
The Oregon Court of Appeals recently gave an employee the green light to
take his claim of injured worker discrimination to a jury. In Kirkwood
v. Western Hyway Oil, 204 Or App 287 (2006), the employer argued it
fired the worker for insubordination (yelling at a dispatcher) and
discrepancies in time sheets. The worker argued the termination was because
of his injury that occurred three years prior. The court found a factual
dispute sufficient to be heard by a jury. Several factors influenced this
finding. First, the court gave weight to the fact that the employer refused
to give any reason for termination to the employee initially. Evidence
suggested the yelling incident and time sheet discrepancies were not fully
investigated before the termination decision. Finally, the injury had been
substantial and had increased the employer’s experience rating with its
insurer. This case emphasizes that avoiding or, if necessary, defending a
valid termination of a previously injured employee depends on consistent
application and documentation of performance standards. Changing the reason
for a termination or failing to truly investigate the stated incidents
leading to a termination make the termination suspect in the eyes of the
court.
Reasons for termination and eligibility for unemployment benefits.
- Employee Misconduct
Failure to provide medical documentation as requested by the employer may
not disqualify an employee from receiving unemployment benefits after
termination. The Court of Appeals recently reversed and remanded a decision
of the Employment Appeals Board (EAB) considering this scenario. An employee
was terminated for failing to provide medical certification for FMLA leave
as required under the employer’s policy. Goin v. Employment Dept.,
203 Or App 758 (2006). EAB found this failure constituted misconduct and
denied unemployment benefits. The Court of Appeals disagreed, indicating
that the misconduct had to be “wanton or willfully negligent disregard of
the employer’s interest.” Because the employee testified she mistakenly
thought her physician would provide the documentation, the Court remanded to
the EAB to consider if the wanton or willful requirement had been met.
- Changes to Drug Rules
Effective March 1, 2006, new rules pertaining to drug and alcohol testing
have been implemented by Oregon’s Employment Department. These new rules
affect when an employee terminated for violating a drug or alcohol policy is
eligible for unemployment. On the face, these changes appear favorable for
employers, giving greater latitude to what “testing positive” means and when
an employer has “probable cause” to administer drug tests. To take
advantage of these new rules, employers need to have a written drug free
policy in place.
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